We propose to continue studies on the role of the sphingolipid ceramide, as an inducer of apoptosis in neonatal rat oligodendrocytes: a model for neurodegenerative disease involving mental retardation. We will initially test a hypothesis that cytokine-mediated activation of caspase-8-driven apoptosis involves increased ceramide either from increased de novo synthesis or increased formation from sphingomyelin following acid/neutral sphingomyelinase activation. We will then determine if the cellular site of this ceramide increase during apoptosis is the detergent-resistant surface membrane fraction (caveolae) also known as Rafts and verify that these sphingolipid/cholesterol-rich domains are scaffolds for signaling complexes, involving tyrosine phospho-kinases such as Fyn and PP2A phosphatases, which lead to apoptosis. We will then address the question of mechanisms by focusing on the ability of ceramide to inactivate the anti-apoptotic phospho-Akt through phosphatase degradation of Akt-P and BAD-P. Since ceramide does not directly dephosphorylate Phospho-Akt we will test the hypothesis that PTEN phosphoinositide phosphatase is involved, based on the activation of Akt by polyphosphoinositides, their loss of during apoptosis, and evidence for PTEN localization in Rafts. Finally we will attempt to link all these events together based on our recent novel observation that overexpression of Palmitoyl:protein thioesterase leads to protection against killing by ceramide by activating Akt. We will test the hypothesis that this is because decreased palmitoylation of caveolin and signaling molecules such as Ras and Fyn leads to disruption of Raft-based pro-apoptotic signaling. By precisely characterizing the role of ceramide we hope to identify new sphingolipid-based strategies for the therapy of a range of neurodegenerative diseases including mental retardation.